Richard Tyler is the Daily Telegraph's Enterprise Editor. He writes about all aspects of business life and edits the Telegraph's Your Business page, which appears in print every Tuesday and Sunday and is updated daily online. Aged 35, he still believes he's young, but the white hairs appearing on his chin suggest otherwise.

Budget 2010: small business fund has few backers

Promises, promises. It’s almost six months since Gordon Brown first promised British business that the Government would come up with a new investment fund to back growing firms. Today Alistair Darling will say that some progress has at last been made. I’ve been told that he has managed to sign up at least four major banks – including the two he owns on behalf of us – to create the fund, which will be known as either the Growth Capital Fund or the Small Business Growth Fund (depending on which Government source you talk to).

With the Government acting as an anchor investor, the Royal Bank of Scotland and Lloyds are stumping up around £100m each and Santander and Clydesdale have agreed to invest smaller but still significant sums. HSBC and Standard Chartered have both said ‘no, it’s not for us’, and Barclays is “still considering”. (Lord Davies, the Small Business minister and former Standard Chartered chairman, keeps saying he has signed up “all” the banks – there may be some arm twisting in the final hour before the Budget!)

At the moment the fund will have up to £300m to invest in businesses with turnover of between £1m and £25m, I’m told. The aim is to hit £500m before the fund begins to invest. The catch is that no one actually knows when this will happen. Progress has been slow since Mr Brown first gave the project his personal support. The banks have not been impressed by the civil servants involved, who have been happy to talk vaguely about how the banks’ money will be invested and whether they will ever see it back again.

That said the banks want to be seen to be supporting small businesses and this is one way to achieve that aim. The fund is part economic return (a 12pc internal rate of return is expected) and part social, I’m told. “It’s not a clear cut investment opportunity but something that we believe makes good sense for the broader economy,” says one person involved.

They all believe that there is a gap in the market where perfectly good businesses that require between £2m and £10m of investment do struggle to raise it. So now the Government is intervening. It will appoint a chairman and investment committee to set the investment criteria. (I’m not quite sure why they are using their existing Capital for Enterprise agency – maybe they should as it will save money.)

Then private sector fund managers will invest. Quite when that happens remains to be seen. But don’t plan for the cash until 2011.